Corporate Development 101
The largest companies, approximately $500 million plus revenue, typically employ their own Corporate Development teams. The team is typically made up of VPs, Directors and Analysts. The primary goal is to develop an acquisition strategy that is signed off by both the Executive Team and Board of Directors, and to close on those identified targets. From time to time, these teams will also execute on divestitures or other special projects that do not fit into other corporate functional groups.
Smaller companies still want to focus on Corporate Development, but due to budget constraints, the task is often given to the CFO. This generally comes up when banking contacts or other intermediaries inform the CFO of a potential acquisition. Unfortunately, this approach is opportunistic and not strategic; it does not consider the universe of companies that fit the core strategy. Additionally, it will put the company in the middle of an auction process. Such processes are designed to create competition and inflate the selling price multiple. Internal Corporate Development teams are much better positioned to develop proprietary deal flow and avoid a costly and stressful auction process.
Corporate Development Services at Sun Acquisitions is your outsourcing partner for companies lacking the capital and human resources to pursue a strategic approach. Our process includes:
- Understanding target markets
- Developing a list of potential acquisition targets that fit the strategy
- Providing strategy summary presentation materials
- Calling on the target list and building the on-going relationship with those companies
- For actionable deals, providing initial deal pricing and presentation materials to Management and the Board
- Drafting and negotiation of the Letter of Intent
- Due Diligence support
- Final negotiations, pricing and presentation materials
- Integration advisory services
- Preparing your business segment for sale
- Generating the suggested sale price and related presentation materials
- Confidentially marketing the business through our established sales channels and industry experts
- Active sale updates provided to Management and the Board
- Diligence and closing support
Process matters in every business function. Large companies benefit from their scale to establish M&A teams and robust processes to develop and execute the strategy. On the other hand, small companies generally use an ad hoc process that can be inefficient and costly.
Let our team of experienced Corporate Development professionals at Sun Acquisitions help drive your business to the next level.